Thames Valley: regional is beautiful

Nestling along the western edges of London, the Thames Valley could easily have ideas above its station. Some of its larger firms are keen to get their hands on a bit of City work, and vice versa some large London firms have set up shop there, attracted by the growing number of businesses established in the area.

On the whole however, it remains a diverse area with plenty of high street firms alongside some would-be giants, but for those in between, the question is where to go next: is exponential growth an unavoidable choice past a certain size, or is it possible to remain sustainably successful as a medium size firm?

Grow your own

Field Seymour Parkes is a one office firm with 16 partners, just over 50 fee earners, and 110 staff all in one building in Reading.

'There is a place in the market for our type of firm and that's how we intend to stay,' says Philip Seymour, one of the founding partners of the firm.

Seymour acknowledges that Reading is a difficult place to become established. 'Many City firms thought they could come into Reading because of the proximity to London and do the work at slightly cheaper rates, but most have found that it was not that easy to enter the local market.'

While not competing head-on with the large firms, Seymour's firm is able to stand its own because of the way it is structured and which allows clients to understand the level of service their fees are buying.

'Cost is only one factor taken into account to measure the value of the service,' he says, 'but as a professional, I am also looking at the person providing the service and whether they can take my problem and present me with a viable solution.'

Seymour is also suspicious of growth strategies modelled on City firms. It may be necessary for large City firms to set specific targets for growth and profits because of their specific environment and circumstances, but he doubts that this is essential for smaller regional players. The firm's answer to increased competition is to consistently offer the highest quality of service.

'We are able to offer clients partner-led advice, which the big firms can't afford. On one occasion, the firm on the other side of a deal had its client represented by a trainee,' adds Seymour. 'It may be that a deal worth £10m is small fry for these firms, but at this level, clients should expect partner involvement in some way.'

But the seemingly casual attitude to business development conceals an acute awareness of the realities of legal practice. Field Seymour Parkes does not intend to sit still; in fact, its very existence is the result of a merger between three smaller firms who in 1987 decided to join forces in competition was growing stiffer. Ten years later another firm was taken over to bulk up the firm.

'We certainly intend to grow in the next five years, but we are not going to get to hot under the collar if we don't achieve so many percentage increase and we will concentrate on quality clients,' says Seymour.

'You can't stagnate and you must look to renew, and more often than not, it means growing organically. Organic growth through trainees is a wonderful way of taking the practice forward, but we have also brought lawyers from outside, including two new partners last year,' says Seymour.

More lawyers and a bottom line increase, but Seymour refuses to set fixed targets. 'We are not estate agents, we are professional lawyers trying to offer a first class service at a bearable price'.

Systematic approach

Around the corner from Field Seymour Parkes, the approach at Boyes Turner is decidedly more systematic. In the seven years since managing partner Andrew Chalkley has been at the helm, the firm has grown form 14 partners to 26, has doubled the number of staff to 150 people, and turnover has risen from £4m to £12m.

The firm has a similar client base to Field Seymour Parkes, catering mainly for the local business community and high end private clients, and Chalkley, like Seymour, has watched City firms trying to set a foot in the local market and getting out again.

'There is a very high concentration of businesses,' says Chalkley, 'and there remains a big potential which has attracted outside firms, so our effort has been focused on developing our specific skills and actively targeting clients to whom we feel we can provide a service.'

The plan is simple, according to Chalkley, and it has landed the firm with a raft of technology clients including Ericsson, EDS and Computer Associates. 'We have a direct sales programme where we list the companies we would like to do business with, we identify the needs we think they might require assistance with, and we get in touch informally and see where that might lead. Often, we are pushing an open door.'

Chalkley remains confident that the firm's growth will continue. Even in the current economic climate, technology remains a solid sector.

'The current uncertainties in the property market and in the economy as a whole are unlikely to affect technology long-term,' he says. 'And today's circumstances are very different from the technology bubble burst in the late 1990s.'

Since then, the firm has also expanded it offering to cover employment law, property, general commercial, corporate, as well as corporate recovery work and litigation. But Chalkley stresses that the firm remains focused and has deliberately not chosen at this stage to have dedicated departments in such niche areas as biotechnology, which larger firms have invested in. Though it is one of the areas that it is monitoring closely as it continues to develop.

'Just as employment used to be part of general litigation not so long ago and most firms these days have separate employment departments', he says, 'many firms now have a separate technology department'.

Boyes Turner has an ambitious 15 '“ 20 per cent growth target per annum in the next five years, a demanding objective which is the minimum mid-sized regional firms should aim for if they intend to survive, according to Chalkley. Often the choice is between investing in technology and investing in people but Chalkley believes they should invest in both, even if it puts pressure on IT budgets and on salaries, but the consequence is that growing the top line is essential, or firms will fall behind.

Beyond its active new client strategy, Boyes Turner has thoroughly overhauled its business model to sustain ongoing growth. In practice, this involves active cross-selling and making sure that the business structure is efficient and balanced.

'All firms talk about cross-selling but we are actively doing it,' comments Chalkley. 'Just as we would do with potential new clients, we review our client portfolio and identify the needs we are not currently addressing and work with the client relation partner what more we could offer these clients. It is fundamentally important to develop your relationship with existing clients because this is the best way of growing your practice.'

As to the business structure, Chalkley says that getting the right number of lawyers per partner is essential too in order to offer consistently high service. But this also raises the question of management. As the pressure on regional firms to deliver an always better service increases, so is the need to ensure that lawyers are managed and developed. Remuneration is important, but as partnership has become less accessible in recent years, a rewarding workload and stimulating client base are now an important element in securing staff commitment. In this regard Boyes Turner must be doing something right as it was voted by the Sunday Times best law firm to work for outside London in the less than 250 people category.

But success does not happen 'by magic' and Chalkley says that firms like his are under enormous pressure in terms of people and business management. As regularly reported in Solicitors Journal (see (2007) SJ 151, 42, 9 November 2007), more and more firms are now bringing in professional managers (chief executives or business development specialists) and partners are having to learn new skills.

Whether it is the new Code of Conduct for solicitors, new training obligations, Lexcel accreditation or the new money laundering regulations, obligations on firms are now much more stringent and absorb significantly more time than they did only ten years ago.

Chalkley himself was initially a property law specialist but now devotes his time exclusively to managing and growing the business. A firms of Boyes Turner's size can sustain a full time managing partner, but he says that 'the compliance burden on managing partners who are still fee-earning these days must be colossal.'

The City is calling

With clients such as Bank of Scotland, Fujitsu and Porsche, Pitmans is usually regarded as the largest commercial firm in the Thames valley, and with an office in the City, it is also openly reaching out to the Top 100 hunting ground.

The firm will be fully moving on Nabarro's previous home in Reading, Anchorage House, and managing partner Chris Avery says there is still capacity in both offices. He has just hired new heads of department in employment and construction and is interviewing an average of five people a week.

Like Chalkley, Avery is confident that the current economic situation is a temporary blip. The number of corporate deals his firm has been involved in has not decreased and the outlook for 2008 looks encouraging; as does the outlook for property development. Although the demand for apartments has fallen slightly as a result of the greater number of new builds, the market for commercial property remains promising. Most local developers have met their targets and will be looking to increase their business further next year.

And even if the credit crunch bites harder than is expected, Avery says that entrepreneurs, who represent a sizable part of his clients, are the type likely to take advantage of an economic downturn and will be looking to buy companies at a lower price.

Being one of a small handful of firms with City aspirations, Pitmans would be the perfect regional firm to consider taking advantage of the new structures available under the new Legal Services Act. While Pitmans is not discarding the possibility outright, Avery says that there are no obvious benefits for Pitmans at the moment in opening up its capital to non-lawyers.

Like many others pondering over the value of Alternative Business Structures (ABS), Avery says 'lawyers are fiercely independent and that it is unlikely there will be a mad rush'. Though he agrees that for some national players it could be of more immediate interest.

A presence in the City has helped secure a number of deals, including joint venture with Bank of Scotland for just under £780m but the firm would need bigger deals still to start being seriously interested in ABS or even stock market listing.

'It could be interesting if we wanted to take the practice to national level but that is not our plan at the moment', says Avery.

Thames valley firms appear to be clearly focused on their region. The lure of London is very real for some but unlike their counterparts to the South East and South of the capital, they are, for the time being firmly rooted in the region where they were born.